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Sunday, June 26, 2016

Tom Hickey — Summary on the reaction to Brexit

1. Social

The “little people” as they are called in the US, or “lower classes,” asserted their right to rule as the majority in a democracy. This was unforeseen by pundits and the elite in general, who believed that the media could influence the public to vote as usual with the elite. The result is surprise and even shock reverberating in the bubble. The flood of punditry pouring out now is masking confusion resulting from the disruption of the social order since who the winners and losers will be is unclear. Everyone is trying to rescue what they can by getting head of the curve in shaping the narrative, which is in flux. This is not revolution yet, but it is major disruption and signals trouble ahead for elites, who depend on maintaining the social order that privileges them. Some are actually scared, as are some in the US over the rise of populism and dissatisfaction with inequality.

2. Political

The majority of the political commentary from the side of the elite, which owns the media, is critical of the referendum as an instrument of direct democracy. Pundits agree that the people (Greek demos) cannot be trusted to vote even in their own real interest, let alone of the country as whole. Therefore, the elite concludes that the use of the referendum needs to be abolished or at least hobbled, for example, by requiring a supermajority such as 60% rather than a simple majority: This cannot be permitted to happen again and it was foolish to let it happen in the first place. The rise of the rabble is the worst fear of conservatives, who assume that the people should be ruled by "their betters."

3. Economic

Being unexpected by elites that predominantly control markets, who were taken by surprise even though polling was close, the result produced a shock that sent markets into a tailspin. Whether this will spread to the real economy is unclear, as are the intermediate and long term economic effects of the referendum. Since voting for leaving is not actually leaving, which will take years if it happens at all, powerful forces are gathering in the UK, Europe and the US to ensure it doesn’t, since taking apart existing arrangements and replacing them would be a mess that would likely be terrible for business and finance with uncertainty undermining confidence. Moreover, this is a direct blow struck at the internationalist world order that Western liberal elites have been pursuing since the end of WWII to extend transnational capitalism globally.

4. International

The vote is being denounced as a blow to the liberal world order fashioned since WWII in order to "spread freedom and democracy" and "end all wars." While this is the advertised goal of liberal internationalism as well as to neoconservatism, both are really based on spreading “freedom and democracy” as a euphemism for liberalization, privatization and deregulation as a means to reduce the size and influence of government on business and finance, and to transfer public assets to private ownership under transnational capitalism controlled by the West and the US in particular. The world order under neoliberal globalization is perceived as threatened politically by rising nationalism asserting itself a presence for national sovereignty and democracy over internationalism and economically by a demand for distributive justice over transnational capitalism. The leave vote has ratcheted this up several notches.

Conclusion

Brexit is an elite nightmare all around. Expect a strong reaction to reverse course and return to the status quo, or if this not possible to salvage what can be salvaged of the internationalists' project for neoliberal globalization under Western liberal leadership and control. The immediate objective is to prevent contagion.

Re deprivileging banks, there's one privilege they have and which I'd like to see removed, namely the right to print or create money. The exact way that privilege is confined to private banks is set out by Prof Richard Werner here:

I'm not interested in stopping banks (or anyone) from creating liabilities for fiat. I'm interested in making sure those liabilities are real, including wrt the public. Currently, bank liabilities wrt the public are largely a sham. If/when physical fiat is abolished then those liabilities will be ENTIRELY a sham.

US fiat exists in two forms, physical fiat, aka "cash" (dollar bills and coins) and account balances at the Federal Reserve.

Citizens should be able to deal with BOTH forms of fiat which means citizens should be allowed accounts at the Federal Reserve and deposit insurance and other privileges for the banks abolished.

Those who wish to reform banking without removing those privileges remind me of the monkey with his hand caught in a cookie jar. All he has to do is let go of the cookie and he can pull his hand out but his greed keeps him trapped.

God doesnt give a flying fuck about any of this material moron-fest Andrew .... we have been delegated authority to run these systems/institutions any way we determine... macro results are what should be important wrt these material issues, not the details of how we do it...

We get a group of morons like the EU incompetents and we should just throw them out of their positions of rule for incompetence... bring in the next bunch and see what they can do...

This was unforeseen by pundits and the elite in general, who believed that the media could influence the public to vote as usual with the elite. The result is surprise and even shock reverberating in the bubble.